It's been a "conceptual" argument, here, for as long as I can remember... And Andy is absolutely correct, that NONE of the charts he's ever published (on this blog), have ever labeled a P3...

The idea of P3 is, though, kept alive (as a theoretical possibility)... And it should be... Why? Because if you look at charts of the past, P3's have happened before (according to how the theory is labeled)...

It is logical to assume that there is a possibility that something which has happened before, can (or will), happen at some point again in the future (given the "cyclical" nature of nature itself)... Ritholtz himself should appreciate that because he talks about cycles all the time...

But back to P3... If or when it does happen, it's likely that most people are ill prepared for the consequences... People knew (for days) that a hurricane was bearing down on New Orleans... Let's see... I've driven a car from Washington DC to Los Angeles before in 48 hours... So I'm wondering why there was all the chaos in New Orleans... Oh yeah - it was Bush's fault that people stayed in town...

What's so "scary" about world financial markets? The main problem is that it's a faith based system... Nowadays, the total amount of kinetic energy that could potentially be released onto a global system has reached complexity to the n'th... Warren Buffett himself called these derivatives WMD's...

So far, the financial system has managed to delay that trigger, but it's bound to be tripped sooner or later... probably when people least expect...

When you buy insurance policy for your car, you pay a premium that covers you wherever, or whenever... If you KNEW when, or where, you were going to get into an accident, and if it were possible, you might try avoiding paying insurance all the way up until the day on the calendar that you knew the accident was going to occur...

I call this blog SURVIVOR CAPITAL... It's called that because I like to think that enough 'logic' gets bantered about to motivate people to BE PREPARED...

It's NOT called SC because I when I buy that insurance policy for the car, I'm hoping that I'll get into a crash that day (so as to redeem the value of what I purchased - or before it expires worthless)...

I try not to get in discussion anymore with the random bloggers that talk about P3 as if they've spent time understanding what it could mean, where the forecast comes from, etc. With the comment "if the market didn't go to 0 in 2008-09 then it's not going there now:"

1. This reveals a complete lack of any knowledge of wave theory, as nothing happens in "one move" and there was not one single wave theorist that I know that was calling for P3 in one move, it was a forecast that would last many years, not 18 months with very little to no credit deflation during the period relative to the amount of credit outstanding. 2. P3 is not a forecast for the market to go to 0, the very worst downside projections don't even put it there and well over a year ago many of us talking about P3 questioned some of the projections Prechter put out.

I would imagine there was someone in Rome that once made the same comment, that since markets hadn't gone to 0 they never would, and then of course, they watched markets go down there for 60 years, to 0.

to your point, exactly right, the P3 forecast isn't about being a "bear" at all and trying to make money on the short side, Prechter, the person that came up with the forecast, has very specifically warned that during P3 it is likely shorts will not all be paid, the whole premise of all the books Prechter has written over the years on the subject is to get yourself as safe as you possibly can, something that last I checked has basically been the best thing to do since he put the book out, it's the whole reason CTC was written to teach people how to get safe as possible so that when it's over you can participate in the huge bull market that is expected to follow.

I would bet on this blog here that maybe 3 or 4 of us tops, and I'm not even sure it's that many, that has made any preparation at all in case something like this happened where there were large runs on banks, credit completely froze up, insurance companies go under, there is a shortage of notes available, etc.

Why people would dismiss these risks right now and just go about their daily business after they've been made aware I don't really understand at all, but that's not my problem and people are going to have to live with their decisions for better or worse, kind of like folks that voted for change.

it's also difficult to discuss such concepts with someone that so clearly believes in efficient markets, it's the only explanation for a comment such as this:

"The problem with a CA default crashing the markets thesis is that it is already a known quantity. No surprise there. Everyone knows CA and IL, among others, are in trouble. And Greece and Ireland etc."

If that one doesn't make you scratch your head I'm not sure anything will.

- OK, so the peanut butter that I buy, I eat 18 months from now (instead of tomorrow)...

- Because I grow tomatoes in the garden, I don't need to use up a gallon of gasoline to drive back and forth to the grocery store to buy tomatoes for my BLT sandwich... Representing a "savings" in terms of carbon footprint... AND a savings on the price of the tomatoes & gasoline... (I suppose it's MUCH WISER to shop at supermarkets and donate all your $$ to Obama, Gore, and all their "carbon tax" campaigns)... Because they're so "smart"...

I'm still wondering who attended to Michele Obama's "okra"... She was off in Spain and at Martha's Vineyard during the "growing season"...

See... That's why CV IS NOT SMART... I haven't figured out yet how to get the seeds to jump out of the bag themselves, land in perfect rows, on tilled soil, grow without watering or weeding, harvest themselves, jump into baskets, then jar themselves up in fancy little presentation coquettes...

I have 3 cans at the house, way too many, I've been trying for over a year now to get rid of this third one, the company that owned it doesn't exist anymore, I stuck it in my regular can over the summer, they pulled it out and put it back on the side of my house, lol.

Fille them about 1/3 with some worked dirt mixed with a little peat... Drill 1/8" holes about a foot from the bottom all around (for drainage)...

This winter, just keep any kind of potatoes you like in the dark in a burlap sack in the basement... Come March, cut the ends where the EYE's ar (you'll see the growth starting)...

Put 'em in the trash can under the soil about a half inch to an inch... When the green stalks start to shoot up, let them get taller... Then keep adding more "filler" dirt as they get taller & taller... (Continue to water as needed - just fill to the point that you see the water pouring out of the holes you drilled - keep your seed potatoes ABOVE that line - of course)

By May or June, you'll finally see some stalks turning yellow...

Just dump out your dirt from the trash can... Voila! Your very own potatoes...

>> Note: I'm genuinely interested in how you view the "mechanics" of the money transfer from "lobbyists/banks" to the politicians.

I'm no expert on it. But:

- To win office, you already have to be rich enough to afford to take the risk of not earning an income for a couple of years. We're electing millionaires. Often, these politicians come from the FIRE industry, where they were "successful".

- Who's been most successful the past 20+ years in these fields? Thanks to bailouts years ago, the people who took the most biggest risks were promoted and the risk averse weren't. The risk-embracing bailout-ees of today are the politicians of tomorrow.

- Campaign donations back the person who's (already) expresses loyalty to the lobbyists.

- Lobbyists take politicians on junkets to "educate" them on policies. Paid-for luxury travel.

- The legislative bills are written by the lobbyists, funded not by the little people but by the same rich interests that donate campaign money. (Nancy Pelosi has to "vote for the legislation before she knows what's in it".) Indeed, a politician who spends time reading/thinking about legislation -- instead of outsourcing it to the lobbyists -- is at a campaign disadvantage to the politician who does and who therefore spends a bigger pct of time on raising money.

Ech. Gotta head to work. All this means is that the well-heeled industries rig the game even more in favor of themselves.

"The determinative factor for Dilweg seems to be the Geithner imperative of first paying the bank counterparties in the CDS and effectively repudiating similar guarantees on RMBS, which were destined to eat all of AFG's capital had the State of Wisconsin not intervened."

Tuesday, November 16, 2010Another Touch of IronyPosted by TraderMark Well, thus far QE2 is a dud... 0 for 3. NY Governor Dudley again explicitly said they are manipulating markets... where in the Fed charter is that? In so many words ... we are taking $600B of Treasuries out of the marketplace, and with that money people can go into riskier assets.

Wow... just wow.

And when those risk assets blow up and conservative investors who are were in bonds are taken to the cleaners? Oh well... the Fed is just doing its just creating bubbles every 5-6 years (or in this case 2-3)

...had been gripped by a “mass delusion” that house prices would never fall significantly - “delusions produce bubbles...this bubble was a doozy and its pop felt around the world,” Buffett added.

Mr. Buffett, the largest "mass delusion" is the one that continues on today. You are right in the middle of it and those that you congratulate in your letter are at the front lines of it. I hope for the everyday people of the US and for the country as a whole that you all go up in smoke.

CV, the iphone has a mind of its own.. and when it is flat on a table, it doesn't know sideways from straight.. likewise, in bed.. using it lying down is the worst! oh, and then there is the fact that 30% of the time it can't find service.

E*Trade Financial Corp. (ETFC) reported average trading volume slid 18% in October from a year earlier but rose 14% from the month before.

Industrywide, 2010 trading volume has fallen from year-earlier levels after stocks slumped to a bottom in March 2009 before rebounding sharply.

The electronic broker said October's daily average revenue trades were 145,311. E*Trade added 4,167 U.S. brokerage accounts in October, bringing its customer base to 2.7 million. A year earlier, it added 3,102 accounts.

Total customer assets were $165.9 billion, up 19% from a year earlier and 4.1% from the prior quarter as stocks continue to rally.

Inflows in October were $800 million, compared with $300 million in September and zero a year earlier.

In October, E*Trade swung to a second consecutive quarterly profit as it set aside less money for current and future potential losses.

I've had a boatload of meetings lately, busiest time of the year is right now, it would seem in general business got really slow again in october based on anecdotal things I'm hearing. Who knows though, Philly data has generall been weaker lately so it could just be that. meet with the CFO of a newspaper/ad agency tonight, curious to hear what he tells me about biz, they were very busy this summer I know.

FWI - Another solution to stop mosiquitos and other water lavae laying insects is to put in a little vegetable oil. It will float to the top and act as a barrior to both insects getting into the water and out of.

If the water has any flow to it, it will take the oil with it, so more oil may need to be added, if it is standing water, like in a barrel, bugs will get caught in the oil, but are easy to skim off.

the phone! hey, i just went to match.com.. it is kind of fun! where some of these fellows really, ah, distinguish themselves, is in their "story" or written profile.. this could be my new pastime.. : )

I just found this fellow.. Phil Torcivia.. he is the author of several books, "Such a Nice Guy" and "Still a Nice Guy." He has two cats, loves Cashmere, dark chocolate, wine and Italy!! How could I go wrong, LOL.. he lives 20 miles to the south.. too bad he doesn't surf : (

His bio from Amazon: Torcivia is a divorced man who transplanted himself from Pennsylvania into the treacherous dating pool in Southern California. His feline companions, Syd and Symon, share his home in San Diego and an occasional dish of leftover tuna. Torcivia loves nothing better than bellying up to the bar with his favorite social lubrication (wine) and watching the bizarre mating rituals of the locals, which he translates into humorous essays. He has been single long enough to be involved in a few train wrecks of his own, admitting that he's "one relationship disaster away from a third cat."

News is filled with the cult of shock figure, numbers that demand amazement or alarm. A number comes along that looks bad, awe-inspiringly bad, much worse than we had thought; big, too, bigger than guessed; or radically different from all we thought we knew. Resist. When a number appears that's out of line with others, it tells us one of three things; a; this is an amazing story, b; the number is wrong, c; is has been misinterpreted. Two out of three mean the story is wasting your time, because the easiest way to say something shocking with figures is to be wrong. Outliers - numbers that don't fit the mold - need especial caution: their claims are large, the stakes are high, and so the proper reaction is neither blanket skepticism, nor slack-jawed credulousness, but demand for a higher standard of proof.

Karen -- I have another brother-in-law. He's cute (no comment on mental health issues though) and in excellent shape. You could get married and we could be related. Bring something good for Thanksgiving :-) I'll supply the wine.

"As a result, the well-to-do are keeping their retirement savings liquid in bank accounts and certificates of deposit so the funds will be available for emergencies, says the study, titled "Money on the Sidelines." The report is slated for release on Wednesday, Nov. 17, but Reuters obtained a copy early.

"There's a high cost to this liquidity," says Robert Sollmann Jr. of MetLife. "They are putting their retirement security at risk by not putting their money back to work in the stock market."

....or, just perhaps, they don't have as much money as they did in 1998 or 2007 because of excessive risk in the stock market...did we ask this question of the affluent????

That article that I linked from ZH is getting "pummeled" in the comment section...

Sometimes the ZH crowd is rather odd...

They harp on one idea like "peak oil" and immediately want to discredit everything...

I have no opinion on "peak oil"... I do have an opinion that there are too many people in the world...

OR rather... 6 billion (and growing) people can't live like the western standard of living has for the past 40 years...

It won't happen... There WILL be a "resource shock"... Industrialization has run its course...

Past civilizations had slaves... There were slaves in this era as well... When that ended, they went after children, and immigrants... When that ended, they "outsourced"... Now the OUTSOURCING countries (like China), are simply doing the next batch of outsourcing (Africa, Middle East, poorer neighbors)...

It's still all SLAVERY... But we're running out of slaves, and using up too many resources in the process... It will eventually fold in on itself...

So these "ideas" that this guy has (on smaller communities, less resource utilization), REALLY ARE the only hope for survival...

Unless they happen through effort, they will be FORCED to happen (via collapse)...

I'll let you do the math on that one vs. cash over the same period, don't forget to add your massive dividends in there!

people's blind obsession with the stock market remains at historically insane levels despite the worst decade in US market history. it's amazing how long it takes the rising tide of social mood over 50+ years to die.

which bank stocks though?, I caught some action on WL, that was pretty exciting...I'm very hesitant though to be short any of the big names right now, WL is not JPM or BAC.

Not saying that those couldn't be hugely profitable short sales, but it's a very high risk bet, maybe there are higher probability trades in the near term here, I'm still expecting one last rally leg that should be pretty big here.

I have one of those commercials I really like, it's the new Schwab commercial where the guy is basically saying I just need someone to help show me how to do this in a practical way, I don't want someone asking me about whether or not I want to start a vineyard in retirement....c'mon, a vineyard?

it's a great commercial and it's exactly what the industry is like, it's especially funny to me b/c my company put this thing out a few years ago where we were to ask clients to tell us about their "dreams" in a book, they say you tend to attract clients in this business that are like you, similar personality, I thought this book idea from my company was some fluffy garbage from the start and I didn't want to have people fill out some fairy tale book that had no practical chance of happening in real life, funny thing is I didn't have to, most of my clients, I guess being like me, thought it was dumb and wouldn't fill the book out.

One of them told me very plainly....you know what I dream about.....not running out of money, that's what I'm paying you for.

McF, to start... RF, I have a zillion puts on this right now, taking some off the table though. started buying puts in april, may, can't remember.

when they run up some, I buy more puts. RF is a very crappy bank and I think this is the bank that can't pay back the TARP loan. Also, all their higher management keep quiting every-so-often. 3 more just quit...lol, guess they take the job and once in... see they can't fix a broken bank

is ironic the right word to describe the fact that panels are telling congress that china is manipulating their currency while our federal reserves attempts to manipulate the world's largest economy at the very same time?

k -re "hot bodied geologist!!" hope it's not a hydrogeologist in norcal. my soon-to-be ex-brother-in-law is not prime material. nice enough guy, but probably too immature and erratic.and really, a cricket-playing englishman, isn't that also on your list of things you don't need ;^)how about posting your "criteria" for a group evaluation?

bat.. the geologist was in so cal.. i was going for a 60 mile radius of my zip code.. and my criteria were for fun.. he had to make $150k+ for instance.. age 48-54.. 51 is even too old for me, i can assure you, lol.

For his part, our own Todd Harrison thinks Buffett might be expressing his thanks a bit too early in a still unfolding narrative. “A multi-billionaire sending a "thank you" letter to the government for bailing him out and making him (further) billions?” Harrison writes today in his morning missive. “There's little doubt that the government "bought the cancer and sold the car crash" but that script continues to be written and it's a bit early for hat tips."

It's evident now that Charlie and Warren could give a shit about anything but money. I found the letter just as disgusting as you did Karen. They've always been this way but social mood ignored it, we wanted to exalt our market heros and all those associated with that culture, slowly social mood is desiring to ruin that persona.

I bet WB is outed before this is all over for the fraud he's participated in, the most recent being his accounting tricks with unclaimed losses that nobody seems to care about.

Karen - I am not a geologist, I live about 800miles (One way) from you, I can write a check for over $150,000 (as long as you don't cash it) I don't fall into that age range, but I am old a crochity and for fun I like to go to frozen food section of wall mart and fill the cart, then go to the beer section grab a 6 pack, place it on top of the frozen food (You know to keep it cool) and walk around looking for oversized people, once I run out of beer I like to find a clothing rack to push the cart under and take a nap.

k -shows what i know. assumed in order to see others' profiles on match.com you need to reciprocate and fill out a profile to join. can't tell you how relieved we all are that you haven't put yourself out there "on the market". ;^}

WASHINGTON | Wed Nov 17, 2010 2:45pm EST(Reuters) - President Barack Obama will name Warren Buffett as one of fifteen winners of the 2010 Medal of Freedom, a White House official said on Wednesday.

Buffett, one of the world's most successful investors who has donated a vast chunk of his multibillion dollar fortune to charity, will receive the medal at a White House ceremony early next year. The award is the highest U.S. civilian honor.

Buffett is one of Obama's closest defenders in the business community and the president has sought his counsel dating back to the 2008 presidential campaign and since.

So, in a round about way WB gets to steal from the public via misguided bailouts funded with public money that helps him stay solvent and he gets the "highest civilian honor" as a result?

Huh?

Maybe I should hit a few people on my way home tonight, see what kind of award I could get for that. In the GIB that might be worthy of a Purple Heart or something.

All these people giving each other awards, the government is so Hollywood, it's like the Oscars where they all sit around and talk about how awesome they are, giving each other standing o after standing o, all of them thinking that each simple phrase they utter is a groundbreaking statement that the entire world should stop and listen to. And then they cry as the revel in their own awesomeness.

CV -- while intuitively, I think that scenario for Fri/Mon should work, I have a gigantic black star on my calendar for November 22nd -- it just wants to be an up day. No reason, just likes to go up on November 22nd.

by the close the day after JFK was killed you'd have been down if you were short, pretend that the devil came to you in disguise the day before the event, told you what was going to happen and told you that he'd give you a million dollars to make a bet in the market with the information he'd given you.

how would you have bet? Why would you have bet the way you did?

this is that whole thing about outside events not changing trends I bring up, oh, from time to time.

now imagine the devil comes to you again, but this time he's got a beard and a suit and several trillion dollars

Karen, exactly! you consider the math on that and the statement itself is so nutso you can't do anything but laugh, of course, most people are going to look at that and see a 7 on the jobs number and a 6 on the QE2 number.

what the hell indeed, that's the way the world's always been, you'd think someone from the bronze age would understand that by now, she's probably been seeing exactly that longer than any of us have been alive, might not have gotten it into a spreadsheet just yet though.

i'll check back later! thanks for sharing this day with me.. no one else would believe me if I told them what had transpired.. and i couldn't have made it thru WB's thank you, let alone his medal of freedom announcement, without your support..

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This blog should not be interpreted as investment advice of any kind.The authors are NOT representing themselves CTAs or CFAs or Investment/Trading Advisor of any kind.The authors may or may not trade in the markets discussed.The authors may hold positions opposite of what may by inferred by this blog.The information contained in this blog is taken from sources the authors believes to be reliable, but it is not guaranteed by the authors as to the accuracy or completeness thereof and is presented here for information purposes only. Commodity trading involves risk and is not for everyone.

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"The Shawshank Redemption"

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This Blog's primary focus is on trading based upon technical analysis. It is run by "AmenRa" and "AndyT," quasi-anonymous traders who employ technical analysis to assess market conditions and trading opportunities. AmenRa utilizes 3LB techniques, Moving Averages and Fibonacci sequences. AndyT's analysis relies primarily on "Wave Theory" and Fibonacci sequences. The Comments Section is uncensored and open to the public. Please try and adhere to the "Blogger Policy."